NEW CRA Trust Reporting Rule that Affects Real Estate Investors
ฝัง
- เผยแพร่เมื่อ 25 ก.ค. 2024
- The Canadian tax landscape has changed, and it's essential for property owners and real estate investors to stay informed!
The trust reporting has been announced by the government for a number of years. This new trust reporting rule was supposed to be implemented by the government in 2022, but they decided to prioritize the Underused Housing Tax Act implementation over this trust reporting.
Don't get caught off guard by the new regulations - get the full insight here!
Key Moments In This Episode
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00:00 - Intro to Trust Return Filing for Property Owners
02:02 - Legal vs. Beneficial Ownership Explained
04:06 - Trust Reporting for Joint Accounts
06:11 - No Filing Needed Under $50,000: Criteria Clarified
08:17 - Real Estate Investors: New Filing Requirements
10:21 - Reporting for Joint Property Ownership
12:16 - Full-Year Trust Return Filing Breakdown
14:19 - Penalties and Corporate Tax Must-Knows
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Please make sure to speak to a professional that knows your personal situation before making a decision.
If you need to talk to someone on my team, email us at admin@cccpa.ca.
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DISCLAIMER:
Real estate Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your legal and tax advisors to ensure you get the best personalized advice.
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www.therealestateaccountants.ca/update-yto
Thank you for this info. Does this rule apply to non-residents as well? Say, a foreign couple owns a rental proprty in Canada and one spouse reports all the income.
If I do not have a Bare Trust Agreement in place now but I am in the process of getting it signed, do I need to complete a T3 tax return. I have a property in Calgary, Alberta which my son and his family have lived in as their principal residence since it was purchased?
Can the Bare Trust Agreement be backdated to the time the house was puchased?
Very specific question. Trust can exist with or without a bare trust agreement. You should speak to your lawyer re backdating
Thanks for the video. You mention joint accounts between parents and adult children being included with this new ruling. If both use the chequing account does it still fall into a Trust category? What about non registered investment account (JWRS) between parent and adult children? If all parties are reporting theit share of the income, does it still fall under a trust category?
If the legal title and the true ownership of the accounts are the same, then there're no trust relationship. If the legal title and the ownership split/entitlement are not the same, then there's a trust relationship. Hopefully it helps.
Thank you for the information. If my dad is on the mortgage with me on my property but he also owns a portion of the house does this fall under the bare trust and needs to be reported? From my understanding the bare trust is applicable only if he co sign the property but does not actually own any portion of the property and makes no decision on it. Am I correct?
Bare trust return filing requirement has been cancelled yesterday. No requirement to file for 2023.
Thank you for the information. How about if you have only 1% ownership to help friend get approved for mortgage. Do you still have to file
Tax and also the capital gain point! Not real ownership only helping to get mortgage approval
Even if you are 0.5% owner, it means you share your portion in ownership. CRA doesn’t consider you’re helping but what is written on the document.
I think you can have your name removed legally before they sell it. That can probably save you from having to report it as a capital gain.
CRA looks at the actual beneficial ownership - not just legal ownership. If the 1% is meant to be just for mortgage, and you don't truly own the property, you might have a trust relationship exist and you might have the trust filing requirement. Sounds like this is the case for you without getting into too much detail.
On the flip side, if your intention is to truly own that 1%, then you might not have the trust filing obligation. However, you have to report 1% of the gain on disposal of assets.
@@mithulasri1369Doesn't mean you don't have the trust reporting obligation from 2023 onwards.
@@rasikawadibhasme4985It really goes back to your intention and true arrangement. CRA does recognize the concept of beneficial ownership.
Is this considered a bare trust.
Daughter on elderly parents chequing account to assist them only (So joint).
Now there is a POA on the account. Just recently added as parent no longer mentally competent.
So we have a joint with a poa on it as well.
Is it a bare trust? And needs a t3.
Ur opinion?
If the legal title and the true ownership of the accounts are the same, then there're no trust relationship. If the legal title and the ownership split/entitlement are not the same, then there's a trust relationship. POA or not.
Hopefully it helps.
I own a property , my name is on the deed. But its a joint venture. We both report 50 percent income and expenses. Do i have to file?
Yes that's a trust relationship but Bare trust return filing requirement has been cancelled yesterday. No requirement to file for 2023.
My two siblings, mother and I are joint owners of house since day one of ownership. Forgot whether it's joint tenant or tenant in common. Does this fall into "the legal title and the true ownership of the accounts are the same" or "bare trust". If trust exists, mother is the beneficiary and the kids are the trustee? And who the lucky one that gets to file? One of trustee files T3 and schedule 5 or all parties? Thanks.
I’m in the same situation.
My mother , my brother and I are joint tenants.
My brother is a dependant as he’s intellectually delayed and they both live together in that home.
I have another home sole ownership.
I imagine this is a trust situation.
Not sure though
Yes it is@@nadura55
Well done!
Thank you. Glad you like it.
What about power of attorney?
what about a US resident selling canada land this year for 2 mill gain? is only half the gain taxable? and what if they owned it prior to 1980? is there a 1980 rule about lowering the capital gains?
Thanks for sharing and it’s a lot of info to digest. I have various bank accounts over $50K sharing with my wife and son. My son has full control of the shared accounts while the rest my wife & I have full control.
Can you please clarify - Do EACH one of us to file a T3 Trust Return for each account OR ONLY the person has control of the account needed to File the T3 Trust Return ?
If all of you are entitled to share the income and expenses of these accounts, and you're reporting taxes the same way, you might not have trust filing obligation.
If some account is owned by you but the funds and the income and expenses generated from the accounts are shared among the three of you, then there's a trust relationship.
Again, it's hard to tell from your description how you own your account. And the number of trusts involved depends on who's on title, who's the trustee, etc.
Thanks for your prompt response. Here is additional info of the accounts. My wife and I opened two accounts as co-owner in two banks, we later (once we retired 5 years ago) added my son to the accounts for reason he can still access the fund in the account in case of our death as not be frozen during probate. There is no other trustee and my son is the only person in trust.
When filing annual tax return, my wife and I have been splitting any dividend/capital gain or loss income generated in T3, T5 or T5008 for tax filing. I never ask my son to file them as he had no share of any gain or loss.
In this case, does my son still need to file the T3 return ?
I am a covenator of my daughter's mortgage but my name is not the property's title. Do I need to file it on T3?
Likely a trust relationship, but Bare trust return filing requirement has been cancelled yesterday. No requirement to file for 2023.
Thanks Cherry for explaining this new filing requirement so well.
Q: Would adding my single adult daughter to the title of my house where she has been residing with me for the past 10 years constitute a bare trust? My daughter wants to continue living in my house after my death; so I want a seamless transfer of the house title to my daughter without going through the probate process. She has never been married and doesn't plan on ever getting married.
Thanks in advance.
Yes, it can be considered bare trust arrangement, depending on your intention. Without sitting down to advise you based on your objective, it is difficult to say if there're any remedies.
Feel free to connect with our team at admin@cccpa.ca or call us at 416-548-4228 and our team can help you.
Hey Cherry - I own a property and have a JV partner. I am on title and claiming expenses and income. Why is this considered a Bare Trust in your opinion? Doesn’t make sense to me.
Bare trust return filing requirement has been cancelled yesterday. No requirement to file for 2023.
Does this CRA ruling cause you to reconsider your recommendations within your Sept. 30/21 tax tips video "How to buy stocks at 50-70% discounts in your TFSA"?
Hi Cherry. I have say 3 GIC investment, 1st one jointly owned with wife, beneficiary son and daughter. 2nd one jointly owned with son, beneficiary wife and daughter. 3rd one jointly owned with daughter, beneficiary wife and son. All GIC are more than $50K. I file T5 for all interest. Do I need to report trust tax return? Thanks.
Forgot to mention. Both son and daughter are adult. An all initial investments are funded by myself and wife only.
@@allentam7747 Sounds like you might have some trust filing requirement. Best to speak with your own accountant to help you with your situation.
@@RealEstateTaxTips Thanks for your quick response. Unfortunately I do not have an accountant to work with. After reading other comments and your response, may I ask another quick question. What if I split the T5 interest reporting equally for each title owner on all GIC, will I still need to file trust tax return? Thanks in advance.
The minister has cancelled the rule as of march 28, at the 11th hour!
Yes this was filmed last year
Are executor fees a bare trust
Fees aren't but the executor is the trustee of the estate. I do think that the estate need to file a trust return
Scenario question - parents hold property with their adult child as joint tenants with rights of survivorship with a trust agreement that says their intention is for the interest to be a gift. It is the child’s principal residence. From what I understand from the lawyer, this property flows outside of the will upon the parent’s death - no probate, no capital gains. But this video seems like there is a reporting requirement for every year that that is the situation? Will there be tax due at any point on this?
Legal and tax are two separate issues. If you have a trust agreement, there's a filing obligation. In terms of tax implication on death, may need to come in for a consultation to make a proper determination.
My adult daughter is joint owner and lives with me. She lives with me and we share expenses. She is now on disability. Do I still file a trust account?
@@butwhytharum- Sorry, we live in the same town home for many years and is not an empty condo, and we do not have a mortgage. Please read before making rude comments.
@@butwhytharum Where did I say I collected rent. I am a widowed woman 76 years old. Please try to be nice as you do not know my circumstances or is it just your second nature to be nasty.
T3 reporting deadline is NOT 31 Mar 2024. Normally it's 90 days after 31 Dec year end, or 30 Mar. But due Easter long weekend in 2024, filing deadline is 02 Apr 2024 this year. QV: "... Walhout" CFA channel. And others.
Hi Markus, thanks for pointing that out. In my other literature, I did mention April 2. In any case, T3 reporting requirement has been cancelled for bare trustee for 2023 yesterday.
@@RealEstateTaxTips THE MINISTER HAS CANCELLED THE RULE as of march 28
@@rtel123 thanks. This was filmed last year in 2023
hi . I had purchased another house with my wife 10 years ago for 240,000 $ . ( not for rental )we did not made any improvement for this property . and now the house it worth 650.000$ . we both retire with income around 38.000$ annually. if we sell this property today . how much tax we have to pay as capital gain ? can you give us around how much we have to pay for the CRA ? thanks
While we aren't really allowed to provide specific advice to non-clients, here's a video on how to calculate your capital gain tax - th-cam.com/video/rvo7jxekj2g/w-d-xo.htmlfeature=shared
Bottom line, do not use the banks and you do not have to report anything!
Or own anything...
Unfortunately, our government is imposing more red tape. But our government isn't the only one. The US government has also imposed this rule as well also starting this year
More paperwork, more beaurocracy more time and money spent on administration and accounting. Every year it gets worse.
Less time spent on innovation & productivity.
Canada is heading down the drain.
its already down the drain.
That is the purpose of the liberals. They believe in looting, not creating.
Sad but true to some extent. :(
CRA loves to add complexity . . . keeps people working
@@sdandrea5245 Sadly I have to agree, but IRS from the US is doing the same thing... :(
Get the CCP oit of Canada
Google search suggested that it would be Canadian Choice Party?
It's best everybody leave Canada, and find another country with more freedom.🤔
United States government also imposed something similar to this in 2023. It is a big brother move - regardless where you live you'll still be monitored and controlled somehow by the government.
MORE LIES
Bare trust return filing requirement has been cancelled yesterday. No requirement to file for 2023.
Great video! Would you be open to being a guest on our podcast? I sent you a DM on instagram as well.
Sure thing!